Meaning of offshore fund: other arrangements that create rights in the nature of co-ownership - Section 355(1)(c)TIOPA 2010
All mutual funds constituted by ‘other arrangements’ (i.e. those not constituted by bodies corporate or where property is held on trust) creating rights in the nature of co-ownership, which take effect by virtue of the law of a territory outside the UK, are brought within the definition of an offshore fund.
This is subject to the important exception that mutual funds constituted by two or more persons carrying on a trade or business in partnership and that would otherwise come within the meaning of an offshore fund under S355(1)(c) TIOPA 2010 are specifically excluded from doing so by S355(2) TIOPA 2010.
Co-ownership is not restricted to the meaning of that term in the law of any part of the United Kingdom, so would take its meaning from the law of the territory in which the arrangements take effect.
Types of mutual funds that come within the definition of an offshore fund at S355(1)(c) TIOPA 2010 would include, for example, contractual arrangements such as Luxembourg Fonds Commun de Placement (‘FCPs’), but see OFM03500 onwards for further information concerning these and other types of contractual arrangements that are transparent for income purposes.
See OFM05000 for guidance regarding the meaning of the term ‘mutual fund’.